CIMAPRA19-F01-1 Exam - Topic 4 Question 85 Discussion

Actual exam question for CIMA's CIMAPRA19-F01-1 exam

Question #: 85
Topic #: 4

The statement of profit or loss for PQ, ST and AB for the year ended 31 December 20X0 are shown below:

1. PQ acquired 80% of its subsidiary, ST, on 1 January 20X0 and 40% of its associate, AB, on 1 September 20X0.

2. Since acquistion PQ has sold goods to ST and AB for $20,000 and $30,000 respectively. At the year end both ST and AB have 50% of these goods remaining in inventory. PQ uses a mark-up of 20% on all of its sales.

3. Since acquisition the goodwill in respect of ST has been impaired by $8,000 and the investment in AB has been impaired by $2,000.

4. PQ uses the fair value method for non-controlling interest at acquisition.

What is the value of the unrealized profit in inventory adjustment required to inventory in PQ's consolidated statement of financial position at 31 December 20X0?

A$3,333

B$2,000

C$4,000

D$1,667

Show Suggested Answer

Suggested Answer: D

by Mari at Apr 21, 2024, 04:03 PM

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Veronika

3 months ago

ST has 50% of $20k and AB has 50% of $30k in inventory.

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Pansy

3 months ago

Don't forget the 20% markup on sales!

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Helga

3 months ago

Wait, how did they calculate that? Sounds off.

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Penney

4 months ago

I think it's $4,000, seems right to me!

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Marisha

4 months ago

The unrealized profit in inventory is based on the remaining goods.

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Jules

4 months ago

I feel like the answer could be $2,000, but I’m not entirely confident. I remember something about how to adjust for non-controlling interests, but I’m not sure how it applies here.

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Shaniqua

4 months ago

This question reminds me of a similar practice question we did on consolidated financial statements. I think the unrealized profit might be around $4,000, but I need to double-check my calculations.

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Jolanda

4 months ago

I’m a bit unsure about the exact calculation. I think we might need to consider the mark-up and the percentage of goods left in inventory, but I can't recall the exact steps.

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Celestine

5 months ago

I remember we discussed unrealized profits in inventory during our revision sessions. I think we need to calculate the profit on the goods still in inventory.

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Ahmed

5 months ago

This is a tricky one, but I feel confident I can work through it step-by-step. The key will be breaking it down into manageable parts.

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Alberto

5 months ago

Okay, I think I've got a handle on the key information. Now it's just a matter of crunching the numbers and applying the right formulas.

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Omer

5 months ago

Hmm, I'm a bit confused by the details around the acquisitions and impairments. I'll need to review those closely to make sure I understand the full picture.

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Clement

5 months ago

This looks like a consolidation question, so I'll need to carefully track the intercompany transactions and inventory adjustments.

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Andree

5 months ago

I'm a bit confused by the wording of the question. Does "EXCEPT" mean I need to find the one statement that is false, or the one that is true? I want to make sure I understand before I start analyzing the options.

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Lillian

5 months ago

Hmm, I'm a bit unsure about this one. The question mentions a "limit identifier" called rl_maxrequests, so I'm wondering if that's the key to solving this.

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Sherly

5 months ago

This question seems straightforward, but I want to make sure I understand all the requirements correctly before answering.

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Launa

5 months ago

Tricky question. I'll have to use my knowledge of hospitalist practices to figure out which statement is accurate. Gotta be careful not to overthink it.

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Ena

5 months ago

Alright, let's think this through. The network-admin role is definitely one of the options, as it has broad network management capabilities. The other one is likely the server-profile role, as it can configure server-related policies like LAN Connectivity.

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Lizette

2 years ago

I see where Bob is coming from, but I still think the answer is D) $1,667 because the impairment losses on goodwill and investment should be factored into the calculation.

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Holley

2 years ago

I disagree with I believe the answer is C) $4,000 because the mark-up of 20% on sales needs to be considered for both ST and AB.

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Cammy

2 years ago

I think the answer is A) $3,333 because the unrealized profit in inventory adjustment should cover the remaining goods sold to ST and AB.

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Flo

2 years ago

D) $Rikki,667

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Ciara

2 years ago

C) $,000

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Kimberlie

2 years ago

B) $Kasandra,000

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Kasandra

2 years ago

A) $3,333

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Rikki

2 years ago

What is the value of the unrealized profit in inventory adjustment required to inventory in PQ's consolidated statement of financial position at 3 December 20X0?

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